Russia to cut oil production amid low oil prices — deputy PM

Deputy Prime Minister Arkady Dvorkovich does not rule out that Russia’s oil production may decline if oil prices keep low on the global market.

Deputy Prime Minister Arkady Dvorkovich does not rule out that Russia’s oil production may decline if oil prices keep low on the global market.

"According to our estimates, (oil) production (may) decline amid current environment, in current system and given the proposals on tax system adjustment in the fuel and energy system, first of all introduction of tax on financial result, we may keep production at the current level. But if prices remain at low level for a long time a certain decline is possible, and our partners, other countries, are aware of that," Dvorkovich said, adding that Russia’s "oil sector will adjust itself to changes in the global environment."

However, he said that after the period of low investment in the industry generally around the world is over "oil prices will inevitable rise but no one knows to which level, and production will resume growth then."

According to Dvorkovich, the government can’t directly regulate crude oil production, this being the authority of oil producers, which make investment decisions within the existing regulatory and tax systems in the fuel and energy sector. "The government has no authorities to up or cut production output within this regulatory system. Another question is that in case of low prices and higher taxes it’s clear that there are less triggers from investments, which can result in certain reduction of output," he said.

As Russia’s Energy Ministry reported earlier oil production in the country may keep at last year’s level of 533-534 mln tonnes in 2016.